The NASDAQ Composite closed lower on Friday, as data showed a sharp slowdown in US employment growth and investors worried that US lawmakers would fail to agree on another fiscal stimulus bill to bolster the economy from a COVID-19-induced recession.
The S&P 500 and the Dow Jones Industrial Average ended flat to slightly higher on the day.
With the benchmark S&P 500 index about 1.5 percent below its record high, defensive sectors, including utilities and real estate, were among the gainers.
Tech-related stocks, which have fueled a Wall Street rally since March, posted the biggest declines and helped push the NASDAQ down more than 1 percent during the session.
Along the same line, value names, which have been unable to close the performance gap with growth stocks in the past few years, advanced, with financials gaining more than 2 percent. The S&P 500 value index rose 1.13 percent, while the S&P 500 growth index fell 0.63 percent.
The US Department of Labor’s closely watched report showed that non-farm payrolls last month increased 1.76 million, much lower than the record 4.8 million in June.
However, the figure still topped economists’ expectations and analysts said that it could take the pressure off the US Congress to agree on a relief bill after weeks of wrangling.
Differences have partly centered around continuing an extra US$600 per week in unemployment benefits.
Congressional Democrats on Friday offered to reduce a proposed coronavirus aid package by US$1 trillion if Republicans would add US$1 trillion to their counteroffer, but US President Donald Trump’s negotiators rejected the idea as the latest round of talks ended without a deal.
US Senate Democratic leader Chuck Schumer called the meeting with Republicans disappointing and US House of Representatives Speaker Nancy Pelosi said that an agreement on stimulus seemed unlikely, with differences still largely unresolved.
“The bottom line reality is that unemployment is through the roof with respect to historical averages, we are still in a pandemic with no cure and the politicians have promised another US$1 trillion or more to the American public,” said Mike Zigmont, head of trading at asset management firm Harvest Volatility Management LLC in New York.
“It would be political suicide if they don’t deliver that,” he added.
The Dow Jones Industrial Average on Friday rose 46.5 points, or 0.17 percent, to 27,433.48, the S&P 500 gained 2.12 points, or 0.06 percent, to 3,351.28 and the NASDAQ Composite dropped 97.09 points, or 0.87 percent, to 11,010.98.
The declines snapped the NASDAQ’s seven-session streak of gains, with the Dow and S&P 500 falling after rising for five straight days.
For the week, the Dow rose 3.8 percent, the S&P 500 added 2.45 percent and the NASDAQ gained 2.47 percent.
With the second-quarter corporate earnings season largely over, about 82 percent of S&P 500 companies that have reported so far have beaten dramatically lowered estimates, with earnings on average coming in 22.5 percent above expectations, the highest on record.
T-Mobile US Inc jumped 6.47 percent as it added more-than-expected monthly phone subscribers and said it had overtaken rival AT&T Inc as the second-largest US wireless provider.
The stock was the biggest gainer on the S&P communication services index.
Uber Technologies Inc fell 5.21 percent, as demand for its ride-hailing trips only marginally recovered from pandemic rock-bottom in the second quarter, even as its food-delivery segment saw double the orders.
Meanwhile, Trump late on Thursday unveiled sweeping bans on US transactions with the Chinese owners of messaging app WeChat (微博) and video-sharing app TikTok.
In response, China said the companies complied with US laws and warned that Washington would have to “bear the consequences” of its action.
King Lip, chief investment strategist at Baker Avenue Asset Management LP in San Francisco, said that investors were worried about China’s “potential retaliation” against US actions.
New York-listed Tencent Music Entertainment Group (騰訊音樂), which was spun off from WeChat-owner Tencent Holdings Ltd (騰訊) in 2018, fell 3.32 percent, while Facebook Inc jumped.
Microsoft Corp, which is seeking to buy TikTok’s US operations, also dropped 1.79 percent.
US-listed Chinese stocks, such as Baidu Inc (百度), Alibaba Group Holding (阿里巴巴) and JD.com Inc (京東) also declined.
Advancing issues outnumbered declining ones on the New York Stock Exchange by a 1.43-to-1 ratio; on NASDAQ, a 1.31-to-1 ratio favored advancers.
The S&P 500 posted 36 new 52-week highs and no new lows; the NASDAQ Composite recorded 118 new highs and 10 new lows.
About 9.78 billion shares changed hands in US exchanges, compared with the 10.4 billion daily average over the past 20 sessions.
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